\u3000\u30 Jinzai Food Group Co.Ltd(003000) 36 Beijing Supermap Software Co.Ltd(300036) )
Event: the company announced on March 25 that in 2021, the revenue was 1.875 billion yuan (+ 16.46%), the net profit attributable to the parent was 288 million yuan (+ 22.55%), and the non net profit deducted was 269 million yuan (+ 21.66%).
Key investment points:
The company’s operating performance is stable, benefiting from the construction of Digital China, and may face a period of rapid rise in the future. During the reporting period, the company seized the development opportunities of the industry and achieved steady growth in overall business performance despite repeated impact of the epidemic. In 2021, the revenue was 1.875 billion yuan (+ 16.46%), of which the revenue of GIS software was 1.852 billion yuan (+ 16.40%). As the middle reaches of GIS industrial chain, GIS basic software is the most core competitive aspect of independent intellectual property rights. The company has formed a completely independent GIS technology system and established a leading position in cross platform GIS technology and two-dimensional and three-dimensional integrated GIS technology. In the next few years, the company’s basic soft business is facing major opportunities of information innovation and three-dimensional, which is expected to further improve the market share of related businesses. In terms of orders, the company has completed more basic work in information innovation in 2021. There are information innovation orders in 9 ministries and commissions and more than 30 provinces and cities. There are some benchmark projects at the provincial, ministerial, municipal and county levels. It is expected that there will be more orders this year and next year. In terms of downstream GIS application, the company integrates the common needs of the industry on the basic platform, mainly enabling the resource asset industry, smart city, water conservancy and environmental protection and military industry. At the same time, it also supports more than 700 partners such as Huawei, Inspur, ZTE and UFIDA to develop application software and undertake GIS technology development service projects, jointly provide information construction services for more fields and establish a sustainable geographic information industry ecological chain. We believe that the geographic information industry has become an important part of China’s digital economy. Affected by the continuous introduction of industry guidance and support policies, the in-depth implementation of important localization strategies, the extensive promotion of three-dimensional applications, the accelerated construction of digital government and the accelerated promotion of digital transformation, the company, as a leading enterprise in the industry, will usher in a rapid rise period.
Good cost control and improved profitability. During the reporting period, the company’s expenses were well controlled. During the reporting period, the four expense rates totaled 37.86% (-3.36pcts), which boosted the company’s net sales interest rate of 15.22% (+ 0.67pcts), and the growth rate of net profit attributable to parent company and deduction of non net profit maintained rapid growth. Among them, the growth rate of sales and management expenses is lower than that of revenue, the interest expenses are further increased, and the R & D expenses are basically the same as that of the same period last year. In addition, the company’s inventory was 487 million yuan (+ 49.40%) and contract liabilities were 1.019 billion yuan (+ 6.79%), which was mainly due to the increase in the contract performance cost of the company’s unfinished projects in the current period, and also laid a foundation for future performance growth. Accounts payable was 268 million yuan (+ 59.02%), mainly due to the increase of outsourcing procurement caused by business growth. The net cash flow from operating activities was 180 million yuan (- 21.39%), mainly due to the high proportion of payment collection in November and December, the delay in the repeated acceptance of the epidemic in the fourth quarter, the difficulty of payment collection and so on. The main downstream customers of the company are governments at all levels and relevant institutions. Such customers have strong strength, good reputation and reliable guarantee for the recovery of accounts receivable. The cash flow from financing activities was 732 million yuan (+ Beijing Trust & Far Technology Co.Ltd(300231) %), mainly due to the arrival of funds raised by the company. We believe that the annual revenue and profit growth of the company is steady, and the cost control is good. The completion of the fixed increase will help the company further improve its comprehensive competitive strength and seize strategic development opportunities in the critical period of industry upgrading and development.
3D GIS brings new opportunities for the development of the company. 1) 3D GIS technology has the basic function of building a meta universe base. The company won the bid for the Fusha airport VR project, and the Fusha airport VR immersive experience system procurement implementation project is an immersive experience system with BIM + GIS + VR as the core technology. In the future, the company will further develop more immersive 3D rendering and interaction technologies for the meta universe, as well as more convenient, smarter and more real-world to virtual world geographic mapping tools. These technologies can be widely used in virtual exhibition halls, smart buildings, smart parks, military and emergency simulation training, games in real geographical scenes and other fields, and the demand for new applications will continue to emerge. 2) The full spread of real 3D China will bring opportunities for 3D GIS. On February 24, the general office of the Ministry of natural resources issued the notice on comprehensively promoting the construction of real 3D China, which defined the two construction objectives of real 3D China: by 2025, the terrain level real 3D of 5-meter grid will cover the land and main islands of the country, and the urban level real 3D with 5 cm resolution will initially cover cities above the prefecture level. Based on the autonomous GIS platform, hypergraph has developed the whole process product system of real 3D processing tool set, real 3D data management system, real 3D data service platform and real 3D digital sand table system, supported the construction of real 3D data system with integration of time and space, linkage update, on-demand service and open sharing, and realized the whole life cycle management of real 3D data from processing, database building, update, management to application service, It will play an important role in the construction of real 3D China. We believe that the company has core technology and has deep industry understanding advantages in the application fields of relevant industries. The expanding application scenarios will bring new opportunities for the development of the company.
The strategy cultivates cloud services and international businesses, and is committed to fully covering the subdivided fields of geospatial digital technology, as well as large-scale and low-cost applications. In terms of cloud business, enterprises are a large application group of GIS. The company has been incubated for many years, with 1.8 million registered users. The SaaS revenue of small, medium-sized and Micro customers increased by 50% year-on-year, and the renewal rates of key customers and SaaS customers reached 100% and 55%. At present, the business volume is small, and the excellent business model makes the company regard it as a long-term strategic business. In terms of international business, the epidemic has been affected to some extent, but the company is still actively doing relevant work. In 2021, it actively entered more countries through various forms: the number of Chaotu international partners increased by 34, the number of Mou contracts increased by 37, and 8 international cooperation universities were added. It has recruited many local employees overseas, with more than 30 permanent employees in 19 overseas countries. As the epidemic situation slows down, the company will take more other ways to enhance international market development in the future. We believe that cloud services and internationalization are the historical development opportunities given by the times to China’s leading digital technology enterprises, and are expected to bring the second growth curve to the company in the future.
Investment suggestion: we believe that the company has advanced technology, comprehensive layout and stable business performance in the field of GIS basic software. Under the background that the state continues to increase investment in new infrastructure and information innovation, the construction of real 3D China has been launched, and 3D GIS technology has the basic function of building a meta universe base, the company’s future performance may face a period of continuous and rapid rise. It is predicted that the operating revenue of Beijing Supermap Software Co.Ltd(300036) 2022, 2023 and 2024 will be 2.344 billion yuan, 2.895 billion yuan and 3.548 billion yuan respectively; The net profit attributable to the parent company is 359 million yuan, 448 million yuan and 544 million yuan respectively, and the corresponding EPS is 0.73 yuan, 0.91 yuan and 1.11 yuan respectively. The corresponding PE of the current stock price is 28 times, 23 times and 19 times respectively. Considering the industry position and future development prospects of the company, we give the target price of 28.00 yuan, corresponding to 38 times, 31 times and 25 times PE respectively, maintaining the “buy” rating.
